CFO, The Magazine for Senior Financial Executives articles from September 2005

CFO, The Magazine for Senior Financial Executives archives from September 2005

A new look.(from the editor)(Brief Article)
September 1, 2005... LIFE HAS CHANGED FOR FINANCE EXECUTIVES: business is more global, CFOs are more strategic, and, in general, everyone has less time to absorb more information. Because life has changed for you, it has also changed for us. So with this issue, we...

Retiring thoughts.(letters)(Letter to the Editor)
September 1, 2005... In reading your article on CFOs who are planning for retirement ("Are You Ready for Retirement?" August), I am reminded of the old adage about the shoemaker's children. It is embarrassing that so many sophisticated finance people are in such a...

The Toronto Space Needle?(letters)(Letter to the Editor)
September 1, 2005... Loved your story on U.S. firms taking their IPOs to our friendly neighbors in the north ("Going Public, Eh?" August, page 21). I'm guessing that the restaurant manager at Seattle's Space Needle really enjoyed getting a picture of his landmark...

Of Woodpeckers and programmers.(letters)(Letter to the Editor)
September 1, 2005... After reading "Version Therapy" (Techwatch, June), the first thought to enter my mind was "Weinberg's Second Law: If builders built buildings the way programmers wrote programs, the first woodpecker that came along would destroy civilization."...

Not a printer's error.(letters)(Letter to the Editor)
September 1, 2005... I run a commercial-printing company, and take issue with the idea expressed in "A License to Print Money?" (Newswatch, April) that printing firms are greedy and out to gouge clients. Several times the article mentions the variation between...

Human feedback.(letters)(Letter to the Editor)
September 1, 2005... Thanks for the knowledge imparted in "A Human Inventory" (April). I understand a corporation's attempting to capture expertise, prevent knowledge loss, and ensure business continuity. But what a knowledge repository does not show is the...

Hollywood hits up Wall Street.(FILM FINANCING)
September 1, 2005... AS FILM EXECUTIVES CONTINUE to bank on the combination of star power and tantalizing special effects, the production costs of summer blockbuster movies, like the Paramount/ DreamWorks sci-fi thriller War of the Worlds, continue to soar. The...

Beyond the bottom line.(REPORTING)
September 1, 2005... IN AN EFFORT TO SHOW that they can walk the walk on business ethics, more companies are issuing corporate social responsibility (CSR) reports that detail their environmental, labor, and corporate-giving practices. A study by the Social...

So you say.(topline)
September 1, 2005... In business, new ideas are rare. New jargon, in contrast, seems to spawn like guppies. American poet David Lehman once wrote that "jargon is the verbal sleight of hand that makes the old-hat seem newly fashionable." Consider the variants of...

When is insurance not insurance?(RISK MANAGEMENT)
September 1, 2005... SMALL BUSINESSES and other corporations that create captives as a way to garner a tax break may find that their efforts no longer qualify as insurance activities. A new ruling from the Internal Revenue Service reinterprets tax-code provisions...

Verbatim.(topline)
September 1, 2005... "In recent months, [Federal Reserve chairman Alan Greenspan] has been given to talking about 'froth' in the property market--though he walks all around the whole issue. The man has difficulty actually mouthing the word bubble, I think. It is...

Coffee, with cream, sugar, and interest.(SUPPLIER FINANCING)(FAIR-TRADE CERTIFIED)
September 1, 2005... FAIR-TRADE CERTIFIED (FTC) COFFEE has been a hit at upscale coffee sellers like Starbucks. But with the Venti skim coffee comes an interesting blend of financing: coffee importers that buy FTC coffee must avail credit to their suppliers, if...

Big blue's reporting blues.(STOCK OPTIONS)
September 1, 2005... AS IF VALUING STOCK OPTIONS weren't complicated enough, another snag has emerged: how to report the expense. As IBM can attest, it doesn't come easy. In late June, Big Blue announced that the Securities and Exchange Commission was...

Helter-Shelter.(TAX)
September 1, 2005... THE INTERNAL REVENUE SERVICE IS CONTINUING its aggressive crackdown on tax-shelter abuse. In July, the agency announced that 80 executives and 33 companies have agreed to settlement terms to resolve cases of tax avoidance related to...

Net Minders.(SPORTS FINANCE)(Brief Article)
September 1, 2005... NOW THAT PLAYERS AND owners have agreed to terms, the National Hockey League is back on the ice. But in addition to accepting tower salaries--both sides agreed to a salary cap--the players might need to find themselves some good accountants....

Deal booty.(top line)(Brief Article)
September 1, 2005... CEOS AND OTHER TOP EXECUTIVES are coming under fire for the massive payouts they are set to receive when their companies get acquired. Critics say the exorbitant packages can influence companies to make deals that might not make the most...

View from Europe: European business was hardly fazed by London's terror attacks. Other political and economic concerns could be more difficult to overcome.(top line)
September 1, 2005... A FEW DAYS AFTER THE SECOND wave of bomb attacks in London in July, The Daily Telegraph, one of the country's biggest newspapers, ran a cartoon of the map of the city's Underground. But this map was different from the one so familiar to locals...

The 411 on 404: reporting a material weakness in controls can cost shareholders millions and some CFOs their jobs.(by the numbers)
September 1, 2005... WHAT IS THE COST OF UNCOVERING GAPS in your company's controls? To judge from 899 cases in which companies reported material weaknesses in 2004 and during the first four months of 2005, the cost is significant. A new report from proxy adviser...

Apocalypse soon: why you should sweat the really big stuff.(insight)
September 1, 2005... RISK--BIG, DISRUPTIVE RISK--IS THE theme of the day. It's manifest in public concerns about terrorist attacks, nuclear proliferation, global warming, the end of oil, the trade deficit, the budget deficit, and the housing bubble. It's rife in...

It's not you, it's your technology: once an afterthought in M&A, a target's IT systems may be a potential deal-breaker.(in tech)
September 1, 2005... THREE YEARS AGO, WHEN PROGRESS Energy put its Progress Rail Services subsidiary up for sale, a potential buyer demanded a concession on price once it discovered, among other things, that the cost of integrating both companies' technology...

Who's minding the shop?(INTERNAL MONITORING)
September 1, 2005... DURING A NORMAL WORKDAY, public-relations manager Lindsay Peroff generally visits the Website of a Vancouver-based radio station and listens to music online. Christopher Bennett, a PR colleague at junk-removal company 1-800-GOT-JUNK?, follows...

Banking on boutiques: a new breed of investment bank pitches M&A advice to the middle market. What's the advantage over a brand name?(deals)
September 1, 2005... WHEN MARK WATTLES, FOUNDER and former CEO of Hollywood Entertainment Corp., decided to buy the assets of bankrupt Ultimate Electronics Inc. in April, there was no shortage of investment bankers willing to assist with the deal. In fact, his...

Yahoo's Susan Decker.(ON THE RECORD)(Interview)
September 1, 2005... SINCE JOINING THE INTERNET GIANT at the bottom of the dot-com bust in 2000, Susan Decker, 42, has taken Silicon Valley by storm. She is widely credited with leading Yahoo's charge into the search arena, which today accounts for half the...

Secrets of the M&A masters: revealing the path to a successful deal.
September 1, 2005... THE NUMBERS DO NOT inspire confidence Over and over, studies of mergers and acquisitions show that deals fail to create shareholder value. One recent survey says that more than 70 percent of acquisitions fail; another, 61 percent. A third study...

Can you spot the finance expert? Two years after the sec started requiring finance experts on audit committees, it's still not clear who qualifies, or whether it really makes a difference.
September 1, 2005... When the Securities and Exchange Commission began requiring companies to disclose whether or not they have financial experts on their audit committees, Costco Wholesale Corp. board members did not sweat the process, recalls CFO and board member...

Fractured fraternity: oh for the days when auditors were trusted counselors--and not pricey overseers.
September 1, 2005... During the past three decades or so, Patrick Scannell has had countless conversations with accountants. It's hardly surprising. Scannell, 28 years in corporate finance, has served as CFO at five separate companies, overseen three initial public...

Dream catalog: new software presents a single, up-to-date version of product information.
September 1, 2005... KENNETH T. FLYNN, VICE PRESIDENT and corporate controller at Proliance International Inc., an automotive heating-and-cooling products maker, fairly radiates confidence. That's because whenever a customer needs to check the price or...

Capital ideas: the 2005 working capital survey: despite cheap credit and surplus cash, companies still find plenty of reasons to improve operational efficiency.(in practice)(Illustration)
September 1, 2005... What's dumber than a box of hammers? For home-improvement retailer Lowe's Cos., it's the same box sitting on "high steel," the storage shelves that tower over every aisle, out of reach of customers. "If stock is on high steel, in a back room,...

C-suite dialogues: how the CFO can collaborate to drive profitable growth: in a climate of moderate economic expansion, intense governmental scrutiny, and uncertainty about global competition, CFOs seek to execute their growth strategies by collaborating more closely with their C-level peers. At a recent CFO magazine conference in New York, we learned how.(Advertisement)
September 1, 2005... CFOs serve their CEOs and boards of directors as stewards of information, analysis, decision-making, and, ultimately, financial performance. With their analytical perspective and broad organizational reach, CFOs are uniquely positioned to...

Pension upheaval: will proposed pension reforms actually save the system, or cause more of Corporate America to opt out?(spotlight)
September 1, 2005... IT IS 2005 AND THE PENSION system is in crisis--again. Just as in the mid-1990s, Congress and columnists are warning of the imminent demise of the defined-benefit retirement plan. And again, thanks are due to the failure of a few...

Seeing no evil: the contingent-commission scandal has called into question long-standing insurance practices. But corporate risk managers share the blame.(insurance)
September 1, 2005... LIKE MANY RISK MAN agers, Dave Hennes eagerly awaited notification about his company's financial slice of the $850 million settlement that insurance broker Marsh reached last January 31 with New York Attorney General Eliot Spitzer. When Hennes,...

Spend or cut? A new metric helps CFOs deal with an old dilemma: whether it makes sense to invest in growth or to cut costs.(finance)
September 1, 2005... Most companies, most of the time, think they know when to cut and when to spend. But this is a peculiar time for American business, as companies watch their cash continue to build up even as they keep cutting costs (and tiptoe back into M&A?)....

Getting involved: some CFOs are speaking up about public-policy issues--and getting results.(your move)
September 1, 2005... THERE ARE PLENTY OF CFOs these days who are mad as hell about some law, regulation, or accounting rule. And there are a few who have decided they aren't going to take it any more. One such executive is Alex Davern, CFO of $500 million...

Short shift.(CFO TENURE)
September 1, 2005... AT SOME COMPANIES, THE CFO position is becoming a temp job. In recent years, while struggling to turn around their businesses, Delta Air Lines and advertising giant Interpublic Group have each churned through multiple finance chiefs. In July,...

It's about time.(grapevine)(Brief Article)
September 1, 2005... ACCOUNTING HAS BEEN A STRUGGLE at the Department of Homeland Security (DHS) since its inception in 2003. It has yet to produce audited financial statements, and its mismanagement of large contracts at the Transportation Security Administration...

How markets punish material weakness.(DISCLOSURE)
September 22, 2005... A new report finds that "the mere announcement of a material weakness, independent of the auditor opinion, appears to solicit a negative reaction from investors," But as senior editor Marie Leone reports, those investors may have a poor grasp...

Microsoft vs. spyware.(readers write)(Letter to the editor)
September 22, 2005... Regarding your article on spyware ("Somebody's Watching You," Summer 2005), I have spent more than 30 hours in the past month in a wearying effort to rid my computer of various forms of spyware and malware. These appeared, seemingly, from...

Data privacy and hiring.(readers write)(Letter to the editor)
September 22, 2005... In Readers Write (Summer 2005), C.T. Seidl addresses some good points regarding companies requiring Social Security numbers in the application process, but Seidl does not go far enough. There is absolutely no valid reason why a company needs an...

Data, data everywhere.(readers write)(Letter to the editor)
September 22, 2005... Regarding Nick Cellentani's letter asking why there seems to be little or no planning when it comes to storage (Readers Write, Summer 2005), I submit there are two fundamental and related reasons that perpetually put IT into a reactive...

Inefficient audits inevitable?(readers write)(Letter to the editor)
September 22, 2005... There is little to be surprised about regarding IT's role in Sarbox compliance (Browser, Summer 2005). In response to the Exposure Draft for Standard No. 1 by the Public Company Accounting Oversight Board, the New York State Society of CPAs'...

Reduce acronyms ASAP.(readers write)(Letter to the editor)
September 22, 2005... I am a scientist and engineer who also oversees an entire corporate structure as its chief executive officer. Please note that I did not use "CEO," although I do know what it stands for. I enjoy reading your publication, but I have a bone to...

Correction.(readers write)(Correction notice)(Correction Notice)
September 22, 2005... Our story on BI dashboards ("Gauging Success," Summer 2005) failed to note that software vendor Webplan has changed its name to Kinaxis Corp. We regret the oversight.

All together now, but with differences.(browser: NEWS, TRENDS, AND RESEARCH THAT DRIVE IT STRATEGY)(Brief Article)
September 22, 2005... A recent survey by IDC confirmed what most people have known for some time: companies want to consolidate on fewer IT vendors. But the research firm uncovered an interesting schism between IT execs and line-of-business (LOB) leaders. When asked...

Autodesk: bubbling over.(MANAGEMENT)
September 22, 2005... It's not every software company that can point to the dot-com bust as a good thing, especially when a good portion of its senior management went down in flames. But that's the case at Autodesk Inc., the $1.2 billion maker of computer-aided...

Your place and mine.(WEB CONFERENCING)(Brief Article)
September 22, 2005... When it comes to staying in touch electronically, E-mail and instant messaging predominate while Web conferencing remains something of a well-kept secret. Perhaps not all that well kept: companies did spend more than $500 million on it last...

My way on the highway.(PERSONAL TECHNOLOGY)(Brief Article)
September 22, 2005... Technology vendors often claim that that their products or services solve a "pain point" or a costly and vexing problem. Many executives encounter just such a pain point even before they arrive at the office: traffic jams. Now, companies...

In a fix.(IT METRICS)(Brief Article)
September 22, 2005... What separates a high-performing company from one that performs subpar? Accenture surveyed more than 300 CIOs at large companies around the world (along with large government agencies) and found that, from an IT perspective, the best differ...

Wait 'til next year.(PRICING SOFTWARE)(Brief Article)
September 22, 2005... Oracle's acquisition of ProfitLogic in July is but one sign of the consolidation about to hit the "pricing solutions" sector. So says Forrester Research, which predicts further acquisitions on the part of Oracle, SAP, and PROS Revenue...

Sarbox: year 2: the second time around promises more headaches, but some best practices are emerging.(bookmark)
September 22, 2005... First, the good news: Most companies have endured and survived their initial foray into Sarbanes-Oxley. And while it often proved a costly and occasionally frenzied experience, it has, many companies say, improved the controls that govern...

Building a better workforce: what technology can (and can't) do to help companies optimize their most valuable asset.(Cover story)
September 22, 2005... FIFTY YEARS AGO, A MAN WROTE TO LOOK MAGAZINE columnist Norman Vincent Peale, asking, "What should a person do who is unhappy and bored in his job after twenty years, but who earns a nice salary and hasn't the nerve to leave? He'll never go any...

Online talent shopping.
September 22, 2005... The Internet has shortened the distance between employers and potential employees in any number of ways, from providing companies with a more-economical way to post job openings to sparing job seekers the annoyance of a Sunday spent scouring...

The human-capital factor: the many varieties of HCM software allow companies to manage the employee life cycle.
September 22, 2005... VIRTUALLY ALL FORMS OF IT have been designed to boost employee or corporate performance in some way, but the category called workforce productivity (also known as workforce optimization or human-capital management) is especially fertile....

Whole new ball game: the first decade off e-business was not an unmitigated field of dreams, but some companies are once again ready to take the field.(Company Profile)
September 22, 2005... TEN YEARS AGO, AS NETSCAPE'S IPO KICKED OFF THE DOT-COM BOOM and Amazon.com and eBay brought E-tailing to Main Street, Major League Baseball (MLB) was doing some innovating of its own. The league introduced a new round of play-offs, dubbed the...

All for knot.
September 22, 2005... In the early 1990s, David Liu was a student at New York University's film school dreaming of making it big. And he did, but not on celluloid. Despite knowing nothing about Internet technology, and having no particular affinity for weddings, he...

Wireless wonderland: as companies embrace mobility, many wonder whether any vendor can provide one-stop shopping.(Emergency Response Plan)(Company Profile)
September 22, 2005... WHEN BILL TARA, CIO OF AMERICAN MEDICAL Response Inc., the country's largest private medical-transportation company, needed help rolling out mobile enterprise applications to his company's 18,000 employees, no one answered his 911 call. None of...

WiMax: so close, and yet ...
September 22, 2005... While things move fast in the world of wireless, they don't always move that fast. Consider the wireless broadband service known as WiMax. It is similar to Wi-Fi (think airport and Starbucks "hot spots") but has signals that can travel miles...

Customer disservice? Critics say the promised savings from offshoring come at too steep a price, while companies say very little at all.
September 22, 2005... BIGOTRY AND XENOPHOBIA ARE TRAITS NOT USUALLY associated with San Francisco, which surely ranks among the most diverse, tolerant, and cosmopolitan cities in the world. But when consultant Tom Weakland appeared on a San Francisco radio talk show...

An ounce of retention: nudged by regulators and litigators, companies are making new investments in electronic records management.(storage)
September 22, 2005... Two years ago, Gary Loveridge had a sudden realization--the bad kind. As general counsel for Sutter Health, a nonprofit health-care network, he realized that the way his organization handled growing volumes of E-mail posed a risk. Sutter Health...

ERM at a glance.(storage)(Brief Article)
September 22, 2005... Electronic records management (ERM) solutions involve a number of components. Depending on the size of the company and the scope of the project, deployment can cost anywhere from $10,000 to $3 million. Mark Diamond, president and chief...

Intelligence gets smarter: a burst of innovation has made business-intelligence software more relevant to day-to-day operations.(software.)
September 22, 2005... Cendant Hotel Group, one of the world's largest lodging franchisors, licenses more than 6,300 properties under Travelodge, Super 8, Ramada, and other brand names. To search for rooms and tour packages across this empire, customers can go to the...

Open source: the future of Electronic records.(software)
September 22, 2005... It changed the rules in operating systems (Linux), dominates the market for Web servers (Apache), and has won tens of millions of Websurfers to its cause (Firefox). Can the open-source software model do the same in business intelligence? A...

All boxed up: simplicity, high performance, and low cost make network appliances increasingly popular.(servers)
September 22, 2005... When was the last time you consulted the owner's manual for your refrigerator or toaster oven? Exactly. Kitchen appliances are both familiar and simple (well, usually). They do their jobs unobtrusively, and they require no tinkering. If only...

Survey says ...
September 22, 2005... survey says... OUR ASSETS, OURSELVES: While human-capital management gets a lot of attention from CEOs, it seems to leave CFOs conflicted. Our recent survey found them agreeing that people are important and that training is...